Critical Comparison: ARM (ARMH) versus Linear Technology (LLTC)

ARM (NASDAQ: ARMH) and Linear Technology (NASDAQ:LLTC) are both technology companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, profitability, risk, analyst recommendations, dividends, institutional ownership and valuation.


This table compares ARM and Linear Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ARM 33.10% 19.72% 16.87%
Linear Technology 32.99% 26.98% 23.04%

Valuation and Earnings

This table compares ARM and Linear Technology’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ARM N/A N/A N/A $0.96 N/A
Linear Technology N/A N/A N/A $2.04 31.86

ARM is trading at a lower price-to-earnings ratio than Linear Technology, indicating that it is currently the more affordable of the two stocks.


ARM pays an annual dividend of $0.34 per share. Linear Technology pays an annual dividend of $1.32 per share and has a dividend yield of 2.0%. ARM pays out 35.4% of its earnings in the form of a dividend. Linear Technology pays out 64.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Institutional & Insider Ownership

19.7% of ARM shares are owned by institutional investors. Comparatively, 90.2% of Linear Technology shares are owned by institutional investors. 3.0% of ARM shares are owned by company insiders. Comparatively, 1.2% of Linear Technology shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for ARM and Linear Technology, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ARM 0 0 1 0 3.00
Linear Technology 0 0 0 0 N/A

ARM Company Profile

ARM Holdings plc (ARM) is a company engaged in designing a range of inter-related intellectual property (IP), including microprocessors, Physical IP, and supporting software and tools. Its product offering includes 16/32/64-bit reduced instruction set computing (RISC) microprocessors, data engines, graphics processors, digital libraries, embedded memories, peripherals, software and development tools, as well as analog functions and high-speed connectivity products. The Company licenses and sells its technology and products to international electronics companies, which in turn manufacture, market and sell microprocessors, application-specific integrated circuits (ASICs), application-specific standard processors (ASSPs) and microcontrollers (MCUs) based on ARM’s technology to systems companies for incorporation into a range of end products. Its principal geographic markets are Europe, the United States and Asia Pacific.

Linear Technology Company Profile

Linear Technology Corporation is engaged in designing, manufacturing and marketing a line of analog integrated circuits. The Company produces power management, data conversion, signal conditioning, radio frequency (RF) and interface integrated circuits (ICs) and wireless sensor network products, among others. The Company’s principal product categories include amplifiers, high speed amplifiers, voltage regulators, voltage references, interfaces, data converters, battery stack monitors, silicon oscillators and timer blox, phase locked loop (PLL) synthesizers and clock distribution, SmartMesh embedded wireless sensor network, radio and microwave frequency circuits, Power Over Ethernet (PoE) Controllers, and Other. The Company’s products provide a bridge between analog world and the digital electronics in communications, networking, industrial, transportation, computer, medical, instrumentation, consumer, and military and aerospace systems.

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